Factors affecting the determination of the price of gold

Contents;
 1. Factors affecting gold prices
 2. The role of India in the global gold price

The rise and fall of gold prices are linked to the global economy and many other factors and determinants, as the quantities of gold present around the world do not decrease, but its prices are not fixed and constantly changing, in addition to the fact that gold extraction rates are very simple and do not cover demand most of the time, and here the most important question appears about the reasons The rise and fall of the global gold price.[1]

There is no doubt that the price of gold rises and decreases globally, and this matter is mainly linked to several factors, the most important of which are the following: [2] 

Supply and demand There is no doubt that the ratio of supply and demand plays an important role in determining the expected prices of gold, as the quantities of gold present in The world are still present, as it is an unconsumed product, in addition to the fact that the percentage of its extraction is few and insignificant compared to the supply sometimes, in addition to the fact that some countries consume larger quantities of the global gold stock, so gold is exposed to constantly rising and falling.[2]

 Inflation with currency inflation and the global economy is changing.

 Some values ​​are related to banking exchange and commodity values, and here consumers and individuals may be exposed to loss or profit, but what distinguishes gold is that it is not affected by currency values, as it is considered a suitable option for storage, This is what most companies and individuals do by anticipating gold prices and keeping it as a substitute for currencies of all kinds to preserve capital. [2] 

Interest rates Gold prices can be considered in an inverse relationship with the interest rate imposed on sales, as the real value of gold becomes greater Not because of the rise in gold, but rather because of the rise in interest, which harms the owners of gold when buying and selling, and in fact, countries regulate interest rates according to government decisions for each country to limit exploitation and in line with the internal conditions of the state, and this is circulated to gold traders and owners because manipulation of benefits harms selling rates And buying and causing activity or stagnation in trading operations. [2]

 Currency fluctuations Although gold prices are not subject to the rule of international currencies, they have a slight effect. This is because global gold trading takes place through the currency of the dollar or the Indian rupee, and this plays an important role in the volume of the estimated amount of buying or selling, which contributes to the fluctuation of prices continuously up and down.

India contributes to the production of small amounts of gold globally, and despite this, India is considered one of the most gold-consuming countries with high rates of purchase in religious seasons, parties, etc., and this certainly leads to a decrease in the quantities present in other countries and thus a rise in global prices for gold, and in fact, India has reserves for gold within banks designated for that, as these banks determine the volume of consumption, price, exchange rates and other determinants regarding dealing with gold within the country and under the official supervision of the Indian government.